Dress Barn (DBRN), an evolving apparel retailer, has enhanced its fashion content and beefed up its marketing efforts. Comparable same-store growth is accelerating and with the acquisition of Maurice's the company has added another complementary brand to the fold. I expect improving comps and healthy accretion from the deal to drive valuation ratios higher than the current levels of 11 times projected cash earnings.
WebMethods (WEBM) is a newer name to the portfolio as well. This small-cap company has a leading position in the enterprise application integration software and services business. The enterprise software business seems to be improving after an ugly March quarter and WebMethods has a major product upgrade cycle ahead. With 60% of the stock value in net cash, the software business is priced extremely cheaply at 80% of revenue. If the new product cycle and accelerating growth in licensing revenue does not lead to acceptable profitability, another software management team might give it a try.
Finally, my leading "value concept" stock remains
Please note that due to factors including low market capitalization and/or insufficient public float, we consider Applie Neurosolutions and Webmethods to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.